Healthcare Benefit Costs Undermine Nonprofits' Fiscal Health, Survey Finds

For many nonprofits, escalating healthcare costs are challenging their ability to provide attractive benefit packages to their employees, a recent survey by the finds.

In a July survey of 412 nonprofits, 98 percent of the responding organizations that offer health benefits indicated they are concerned about their organization's healthcare costs, while 59 percent ranked healthcare costs as one of their top challenges. As a result, some organizations have stopped offering health benefits, reduced coverage, and/or required higher employee co-pays and share of insurance costs. Historically, nonprofits have relied on their ability to provide decent benefits to attract and retain quality staff.

According to the report, (15 pages, PDF), 80 percent of nonprofit respondents reported offering health insurance coverage for their employees. And while virtually all the large nonprofits surveyed offered coverage, fewer than half of the smallest did, with cost cited as a major factor in their decision. The report also found that the proportion of nonprofits not offering coverage rose 62 percent compared to the results of a similar survey in 2004.

In addition, nearly three-fourths of nonprofits offering health benefits reported that their organization's total direct health insurance costs had increased over the past year. Indeed, a third of those organizations saw increases exceeding 10 percent, while 80 percent of respondents said they expect such increases to continue.

"Our nation's healthcare crisis is now threatening the ability of nonprofits to effectively carry out the tasks our nation expects of them — sheltering the homeless, training the unemployed, educating our youth, building affordable housing, counseling families, delivering health care, giving voice to the powerless, and enriching our lives with culture and the arts," said Peter Goldberg, chair of the Listening Post Project steering committee and CEO of the . "This is the hidden dimension of America's healthcare crisis, and we need to fix it."

"." Johns Hopkins University Press Release 09/02/2009.